Mail.Ru Group Ltd reports 95.3% Net Income decline while 17.5% Revenue growth
21 Apr 2016 • About Mail.Ru Group Ltd (
$61HE) • By InTwits
Mail.Ru Group Ltd reported 2015 financial results today. Overall the company's long term financial model is characterised by the following facts:
- Mail.Ru Group Ltd has low CAPEX intensity: 5 year average CAPEX/Revenue was 4.1%. At the same time it's a lot of higher than industry average of 2.1%.
- CAPEX is quite volatile: 1,378 in 2015, 978 in 2014, 1,582 in 2013, 994 in 2012, 454 in 2011
- The company has potentially unprofitable business model: ROIC is at 3.5%
- It operates with high leverage: Net Debt/EBITDA is 0.5x while industry average is -0.2x
Below you can find a comprehensive analysis of the key data driving the company's performance and stock price.
Mail.Ru Group Ltd ($61HE) key annual financial indicators
| mln. RUB | 2011 | 2012 | 2013 | 2014 | 2015 | 2015/2014 |
|---|
P&L
|
|---|
| Revenue | 14,935 | 20,905 | 27,070 | 32,327 | 37,986 | 17.5% |
| SG&A | 607 | 751 | 894 | 1,188 | 1,338 | 12.6% |
| EBITDA | 5,958 | 9,005 | 12,825 | 16,333 | 13,144 | -19.5% |
| Net Income | 977 | 38,257 | 26,564 | 62,353 | 2,937 | -95.3% |
Balance Sheet
|
|---|
| Cash | 4,015 | 27,690 | 30,987 | 4,585 | 8,676 | 89.2% |
| Short Term Debt | 0 | 0 | 0 | 5,857 | 4,875 | -16.8% |
| Long Term Debt | 0 | 0 | 0 | 16,205 | 10,331 | -36.2% |
Cash flow
|
|---|
| Capex | 454 | 994 | 1,582 | 978 | 1,378 | 40.9% |
Ratios
|
|---|
| Revenue growth | 78.6% | 40.0% | 29.5% | 19.4% | 17.5% | |
| EBITDA growth | 328.3% | 51.1% | 42.4% | 27.4% | -19.5% | |
| EBITDA Margin | 39.9% | 43.1% | 47.4% | 50.5% | 34.6% | -15.9% |
| Net Income Margin | 6.5% | 183.0% | 98.1% | 192.9% | 7.7% | -185.2% |
| SG&A, % of revenue | 4.1% | 3.6% | 3.3% | 3.7% | 3.5% | -0.2% |
| CAPEX, % of revenue | 3.0% | 4.8% | 5.8% | 3.0% | 3.6% | 0.6% |
| ROIC | 2.9% | 5.7% | 11.4% | 9.8% | 3.5% | -6.3% |
| ROE | 0.9% | 35.4% | 31.0% | 55.7% | 2.0% | -53.7% |
| Net Debt/EBITDA | -0.7x | -3.1x | -2.4x | 1.1x | 0.5x | -0.6x |
Revenue and profitability
The company's Revenue surged on 17.5% in 2015. Despite revenue decline the EBITDA margin expanded. EBITDA Margin increased on 3.2 pp from 16.8% to 20.0% in 2015.
SG&A as a % of Revenue showed almost no change in 2015.
Net Income marign dropped on 185 pp from 193% to 7.7% in 2015.
Capital expenditures (CAPEX) and working capital investments
In 2015 Mail.Ru Group Ltd had CAPEX/Revenue of 3.6%. CAPEX/Revenue decreased slightly on 1.1 pp from 4.8% in 2012 to 3.6% in 2015. It's average level of CAPEX/Revenue for the last three years was 4.2%.
Return on investment
The company operates at low ROIC (3.54%) and ROE (2.02%). ROIC decreased on 6.3 pp from 9.8% to 3.5% in 2015. ROE dropped on 53.7 pp from 55.7% to 2.0% in 2015.
Leverage (Debt)
Debt level is 0.5x Net Debt / EBITDA and 1.2x Debt / EBITDA. Net Debt / EBITDA dropped on 0.6x from 1.1x to 0.5x in 2015. Debt dropped on 31.1% in 2015 while cash surged on 89.2% in 2015.
Appendix 1: Peers in Software & Computer Services
Below you can find Mail.Ru Group Ltd benchmarking vs. other companies in Software & Computer Services industry. It's shown for the period of 5 years for the key financial metrics. Each table has median value for all the companies in the industry together with individual financial data of the top-5 companies in the industry by particular financial metric.
Top companies by Revenue growth, %
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| Coms ($COMS) | | -68.6% | 46.8% | 763.3% | 110.4% |
| Proactis Holdings ($PHD) | | 20.4% | 7.0% | 26.2% | 69.6% |
| Progility ($PGY) | | 4.6% | | | 51.0% |
| Dotdigital Group ($DOTD) | | 6.6% | 27.8% | 32.9% | 31.8% |
| Accesso Technology Grp ($ACSO) | | 16.8% | 28.2% | 27.3% | 24.1% |
| |
|---|
| Median (40 companies) | 34.2% | 7.2% | 5.7% | 4.4% | 3.6% |
|---|
| Mail.Ru Group Ltd ($61HE) | | 40.0% | 29.5% | 19.4% | 17.5% |
Top companies by Gross margin, %
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| Lombard Risk Management ($LRM) | 99.3% | 99.0% | 98.8% | 99.2% | 98.6% |
| Phoenix It Group ($PNX) | 97.1% | 97.0% | 97.2% | 97.6% | 97.9% |
| Wandisco ($WAND) | 92.2% | 91.8% | 80.3% | 80.7% | 93.2% |
| Netcall ($NET) | 86.9% | 88.2% | 89.7% | 91.0% | 90.9% |
| Idox ($IDOX) | 86.6% | 90.4% | 90.8% | 89.4% | 89.3% |
| |
|---|
| Median (34 companies) | 61.0% | 62.7% | 62.0% | 58.9% | 61.3% |
|---|
Top companies by EBITDA margin, %
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| Dotdigital Group ($DOTD) | 29.1% | 31.4% | 39.4% | 29.2% | 32.0% |
| Idox ($IDOX) | 26.5% | 30.9% | 26.1% | 26.0% | 28.6% |
| Oxford Metrics ($OMG) | 7.1% | 15.7% | 6.0% | 14.7% | 28.4% |
| Microgen ($MCGN) | 26.8% | 31.5% | 32.8% | 24.5% | 26.8% |
| Proactis Holdings ($PHD) | 1.7% | 13.3% | 18.3% | 22.8% | 26.4% |
| |
|---|
| Median (40 companies) | 14.1% | 13.3% | 12.8% | 11.1% | 10.6% |
|---|
| Mail.Ru Group Ltd ($61HE) | 39.9% | 43.1% | 47.4% | 50.5% | 34.6% |
Top companies by CAPEX/Revenue, %
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| Coms ($COMS) | 1.1% | 0.5% | 0.9% | 3.4% | 7.5% |
| Csf Group ($CSFG) | 15.4% | 1.5% | 4.0% | 2.4% | 7.1% |
| Nasstar ($NASA) | 7.3% | 17.9% | | 2.1% | 5.2% |
| Unisys Corp ($USY) | 2.1% | 2.1% | 2.5% | 4.1% | 5.0% |
| International Bus Mach Corp ($IBM) | 3.8% | 3.9% | 3.7% | 4.0% | 4.4% |
| |
|---|
| Median (40 companies) | 1.4% | 1.5% | 1.6% | 1.9% | 1.1% |
|---|
| Mail.Ru Group Ltd ($61HE) | 3.0% | 4.8% | 5.8% | 3.0% | 3.6% |
Top companies by ROIC, %
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| Triad Group ($TRD) | -26.9% | 4.1% | -3.8% | 24.5% | 61.5% |
| Dotdigital Group ($DOTD) | 36.6% | 26.4% | 38.0% | 28.5% | 31.4% |
| International Bus Mach Corp ($IBM) | 36.2% | 36.1% | 31.0% | 28.1% | 25.7% |
| Instem ($INS) | 30.3% | 20.6% | 14.7% | 10.9% | 20.4% |
| Kalibrate Technologies ($KLBT) | | 12.5% | 40.2% | 29.2% | 18.8% |
| |
|---|
| Median (40 companies) | 13.6% | 13.0% | 11.6% | 9.0% | 6.2% |
|---|
| Mail.Ru Group Ltd ($61HE) | 2.9% | 5.7% | 11.4% | 9.8% | 3.5% |
Top companies by Net Debt / EBITDA
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| Progility ($PGY) | 1.0x | 2.0x | | 1.8x | 12.8x |
| Parity Group ($PTY) | 6.9x | 4.7x | | 4.9x | 5.1x |
| Nasstar ($NASA) | -2.3x | -5.3x | | 0.0x | 1.9x |
| Phoenix It Group ($PNX) | 1.4x | 4.3x | | | 1.9x |
| International Bus Mach Corp ($IBM) | 0.8x | 0.9x | 1.2x | 1.4x | 1.7x |
| |
|---|
| Median (30 companies) | -0.7x | -0.4x | -0.4x | -0.3x | -0.4x |
|---|
| Mail.Ru Group Ltd ($61HE) | -0.7x | -3.1x | -2.4x | 1.1x | 0.5x |
